President Clinton signed into law last week a 16-pound, 3,000 page
spending bill that includes a $3.5 billion increase over last year's
funding levels for education programs.

The University's Office of Financial Aid estimates that U-M
students will receive a $2.4 million increase in grant and work study
funding next year. The Omnibus Bill raises the maximum Pell Grant to
its highest level ever, from $2,470 to $2,700, and increases Work
Study funding by more than 30 percent. In addition, Javits Fellowship
awards, which have faced elimination in the past, will continue to be
made under another authority.

"I am pleased with the support in the Omnibus Bill for higher
education programs," Interim President Homer A. Neal says. "This bill
provides funding for student financial aid beyond what we anticipated
and suggests that we are making progress in our struggle to convey to
Congress the message that support for our colleges and universities,
and the students they serve, must be a national priority.

"However, we can't rest," he continues. "We need to keep
reiterating this important message."

Despite efforts by some members of Congress to eliminate or place
a cap on the number of schools participating in the Federal Direct
Student Loan Program (also known as Direct Lending), the program will
be funded at the level requested by President Clinton and will have
no cap on participation.

Clinton has been a vocal supporter of Direct Lending, of which the
U-M is a participant, as an alternative to the government guranteed
Federal Family Education Loan Program (FFELP). Under Direct Lending,
federal education loans are made directly to students through the
university rather than the many lenders and agencies participating in
FFELP.

Following two years of vocal opposition in Congress to the
National Endowment for the Humanities and the National Endowment for
the Arts, both programs received no cuts in funding levels for 1997.
International Education received an increase.

The bill also contained funding for a number of agencies and
programs that support research at the U-M, including the National
Institutes of Health (NIH) and Department of Defense.

NIH continued to enjoy strong support by political leaders from
both parties, receiving a 6.9 percent overall increase. Each of the
Institutes, Centers and Divisions saw their funding increase over
last year.

One area of concern for the University, however, is in the Defense
Department portion of the legislation where Basic Research (6.1)
accounts---which provide a portion of federal support for the
engineering disciplines---did not fare as well. Congress has directed
the Department to take additional reductions from the Research,
Testing and Development portion of its budget. How those reductions
are made and their effect on university research will not be known
for several months.

A number of agencies that support research were funded through
separate legislation earlier this fall. As with the bill passed last
week, there is a mix of results regarding research funding. For
example, NASA and the National Science Foundation's research programs
received a good increase, but a number of Department of Energy
programs received significantly less than last year.

"We are extremely pleased with the results of this year's
appropriation process which has resulted in a significant increase
for student financial aid," Provost J. Bernard Machen says. "The news
about NIH and some of the other research agencies is also very
good."

"The final analysis is under way and we should have a clearer
picture of the results within the next week or two," acting Vice
President for Research Frederick C. Neidhardt says. "Overall, the
research funding picture looks brighter than it did when this whole
process began earlier this year. However, there are some areas that
pose concern. More generally, we must continue to pay close attention
to what our political leaders in Washington are contemplating over
the next few years regarding federal support for university-based
research."

U-M staff members will continue to consider the ramifications of
the Omnibus Bill, and the University Record will include a
report in later issue.